Ryan Cohen's $35 Billion Incentive Plan: Can GameStop Deliver?

GameStop is making bold moves to reshape its future. The board of directors has just announced a potentially transformative long-term performance award for CEO Ryan Cohen, who took charge of the struggling retailer in late 2023. This massive compensation structure mirrors strategies used by other major corporations—most notably Tesla, which recently approved a similarly ambitious pay package for CEO Elon Musk based on achieving specific financial milestones.

Under GameStop’s new plan, Ryan Cohen receives no guaranteed salary, cash bonuses, or time-vested stock. Instead, his entire compensation hinges on delivering extraordinary growth. If the company reaches certain thresholds for EBITDA (earnings before interest, taxes, depreciation, and amortization) and market capitalization, he could accumulate tens of billions of dollars in value. This structure creates unprecedented alignment between the CEO and shareholder interests—but it also reveals how much confidence the board has in Ryan Cohen’s vision for the company.

The Incentive Structure: Ambition Meets Reality

The numbers tell the story. GameStop plans to grant Ryan Cohen stock options to purchase over 171.5 million shares at $20.66 per share—worth more than $3.5 billion at current valuations. The full award would exceed $35 billion if GameStop achieves two critical goals: generating $10 billion in annual EBITDA and reaching a $100 billion market capitalization.

Those targets are separated into tranches that unlock at different milestones. The first tranche—10% of the total award—vests once GameStop hits a $20 billion market cap and $2 billion in EBITDA. Shareholders must approve this plan at a special meeting scheduled for March or April 2026.

To put these numbers in perspective: as of early 2026, GameStop had generated approximately $136 million in EBITDA through the first nine months of 2025. The company’s current market valuation stands at around $4.62 million, representing a significant gap between today’s reality and the targets embedded in Ryan Cohen’s incentive plan.

Ryan Cohen’s Track Record: From Vision to Execution

Ryan Cohen didn’t arrive at GameStop by accident. He gained prominence before the company’s 2021 meteoric rise and has consistently advocated for transformation since then. When he formally assumed the CEO role in late 2023, the company was still grappling with a traditional brick-and-mortar retail model that had become increasingly obsolete.

Since taking charge, Ryan Cohen has implemented several strategic initiatives that have begun showing measurable results. The company has systematically reduced its physical store footprint, allowing it to redirect resources toward higher-margin businesses. Most notably, the collectibles segment has exploded in growth, now representing close to 28% of total revenue through the first three quarters of 2025.

However, challenges remain substantial. GameStop’s software business—which focuses on selling new and pre-owned video games—has experienced significant declines. The hardware segment, traditionally the company’s largest revenue driver, continues shrinking, though at a slower pace than software. Despite these headwinds, the company has managed to improve operating cash flow, EBITDA, and earnings year-over-year.

Separating Progress from Valuation Reality

There’s no denying that Ryan Cohen possesses real capability as an executive. He already owns more than 9% of GameStop’s outstanding shares, creating personal financial incentive beyond the formal compensation structure. The operational improvements over the past two years demonstrate thoughtful strategic thinking and disciplined execution.

Yet valuation presents a serious concern. GameStop currently trades at approximately 27 times its annualized 2025 earnings—a steep multiple for a company still struggling to stabilize revenue in two of its three major business segments that collectively generate over 70% of total revenue. This suggests the market has already priced in considerable optimism about the turnaround narrative.

GameStop will likely retain some element of what observers call “meme magic”—the cultural phenomenon that periodically drives outsized price movements disconnected from fundamentals. This volatility creates opportunities for speculators but represents genuine risk for investors seeking conventional value.

The Real Question: Growth Potential vs. Current Risk

The critical question isn’t whether Ryan Cohen is capable or committed—the evidence suggests he is both. The real question is whether GameStop can grow into its current valuation while simultaneously achieving the extraordinary targets embedded in his incentive plan.

The path from a $4.62 million market cap to a $100 billion valuation would require transformative execution. The collectibles business shows promise, but can it scale sufficiently to offset structural declines in gaming software and hardware? The answer remains unclear.

For investors, the Ryan Cohen incentive plan represents an interesting market signal: the board believes transformation is possible and is willing to bet billions in potential compensation on that belief. But belief alone doesn’t guarantee success. The gap between today’s market reality and the plan’s ambitious targets remains substantial, and bridging that gap would require execution that exceeds even most optimistic scenarios.

Before committing capital to GameStop, investors should ask themselves whether they believe the company can overcome its structural challenges in traditional gaming retail while simultaneously capturing meaningful market share in collectibles. The presence of Ryan Cohen and his aligned incentives certainly improves the odds—but the fundamentals suggest this remains a high-risk proposition, regardless of who leads the company.